Sales and Leases | 11
1. Delegation Generally, a party may delegate her contractual duties to a third party, with or without the other party’s consent. Delegation does not relieve the delegator of her duty to perform. But delegation is prohibited if:
the parties agreed to limit or bar delegation; delegation would violate public policy or statute; or
the counterparty has a substantial interest in having the delegator, as opposed to a third party, render or control performance ( e.g. , contract for personal services where the value lies in the promisor’s identity and credentials). 2. Assignment Unless otherwise agreed (and except as provided in UCC § 9-406), all a seller’s or a buyer’s contractual rights can be assigned with or without the other party’s consent—unless assignment would materially:
change the other party’s duty, increase the other party’s burden or risk stemming from the contract, or impair the other party’s chance to obtain return performance.
a. Validity of Contractual Prohibitions on Assignment Article 2 generally honors contractual prohibitions on assignment. However, despite any contrary agreement, a party may assign (1) a right to damages for breach of the whole contract or (2) a right arising out of the assignor’s proper performance of her whole obligation. Unless the circumstances indicate otherwise, any prohibition on assigning “the contract” merely bars the assignor from delegating her duties of performance to the assignee. b. Effect of Assignment on Assignor A mere assignment does not absolve the assignor of her contractual liability. But if the assignor, assignee, and counterparty agree to substitute the assignee as a contractual party in place of the assignor, there is a novation. A novation absolves the assignor of liability. c. Effect of Assignment on Assignee As to any rights assigned, the assignee becomes entitled to receive the counterparty’s
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